By: Chris Bruynis, PhD, Assistant Professor & Extension Educator, OSU Extension.
Recently I read an article that suggested that an Average Crop Revenue Election (ACRE) payment might be possible for the corn crop in Illinois. So, I thought maybe it might be possible here in Ohio. We have relatively good estimates from the National Agricultural Statistical Service (NASS) on the 2012 yield for Ohio. Corn yield is estimated at 123 bushels per acre and soybeans at 43 bushels per acre. Corn represents a decline of approximately 22% and soybeans are down 10% from the five year Ohio Olympic average.
The ACRE revenue guarantee for corn in Ohio is $627. To calculate the actual crop revenue for the state, simply multiply the state average yield times the market average price for the year. The market year starts in September of 2012 and goes through August 2013. Since the market average price is not known, one can determine what the market price needs to be less than by dividing the ACRE revenue guaranty by the average yield. For corn this would be $5.10 per bushel. For September through November the Market year average is $6.76 and the USDA is projecting it to be $7.60 for the year. Unless something drastic happens in the grain markets, it is highly unlikely there will be an ACRE payment in Ohio for the 2012 corn crop.
The same calculation can be made for the soybean crop. By dividing the Ohio soybean revenue guarantee of $493 by the average yield of 43 bushels per acre you get the market year average price beans need to be less than. This calculation yields a MYA price of $11.46. So far in the 2012 marketing year the soybean price average is $14.10 and the USDA is projecting an average price of $14.90.
Readers may wonder why other states such as Illinois appear to be in line for an ACRE payment while Ohio does not. The answer is relatively simple. The average corn yield for Illinois was 101 bushels per acre and their ACRE revenue guarantee for corn was higher than it was in Ohio due to higher corn yields historically. This resulted in a greater percent loss for their farmers.
Don’t feel that farmers in other states are special because they may receive some assistance through ACRE. I am sure they would rather have had the additional yield to sell for the prices offered during the past months than the ACRE payments.